Having led the #StartupIreland pre-budget submission (see here, here, here and here), I was extremely disappointed by Budget 2015. Not only did the government fail to introduce any of the low-cost high-impact measures we recommended, but it actually introduced further disincentives directly targeted at the self-employed.
The only relevant measure introduced was a renewal of the three-year corporate tax relief scheme for startup companies. This scheme has little or no impact on Ireland’s technology startups, and displays a continuing ignorance of the difference in nature between high-growth startups and small companies. Technology startups pour all revenues back into hiring and growth, leaving no profits behind to be taxed. Ireland’s technology startups will receive this lone measure as empty rhetoric, which claims to support them while clearly having little impact at all.
Along with many other entrepreneurs, I was especially dismayed by the introduction of yet another entrepreneurial disincentive. As called out in our pre-budget submission, entrepreneurs are already specifically discouraged by ineligibility for the PAYE tax credit and ineligibility for many aspects of the social security net. With this budget the government has sent another clear message to entrepreneurs that they are not appreciated. The new USC bands specifically single out the self-employed for higher taxes. USC is levied at 11% on entrepreneurial income beyond €100,000, but only 8% for employees. Although few early-stage entrepreneurs can afford to pay themselves so much, the fact that they are singled out sends a clear message that the country does not truly support their long-term efforts towards job creation. While the UK continues to support entrepreneurs and startups through direct tax incentives, Ireland is doing the opposite.
I am sorry to say that it is now more difficult than ever to recommend a career in Ireland to our young innovative startup founders.